As Uganda prepares for the 2025/2026 financial year, the Uganda Debt Network and other civil society organisations have called on the government to improve fiscal discipline by adhering to the Public Finance Management Act (PFMA) and curbing excessive reliance on supplementary budgets.
The call was made during a stakeholder dialogue held at Golden Tulip hotel, organised by the Westminster Foundation for Democracy (WFD), to review the findings of the auditor general’s 2024 report.
The report offers a comprehensive assessment of Uganda’s public financial management performance, particularly in areas such as budget execution, debt management, public investment oversight, and procurement efficiency. According to the findings, although 99% of the Shs 52.7 trillion national budget was audited, only 19% of government entities were subjected to detailed financial scrutiny.
One of the most pressing concerns was the sharp increase in public debt and financial obligations. Non-performing receivables stood at Shs 919 billion, while government payables surged by over 31%, reaching Shs 13.8 trillion.
Pension and gratuity payments were also flagged for irregularities, including overpayments amounting to Shs 20.4 billion and more than 10,000 unverified pensioners on the payroll. Under the PFMA, Parliament is permitted to authorise supplementary budgets amounting to no more than 3% of the approved national budget, and only in situations that are deemed unavoidable or unforeseen.
However, recent practices show that this provision is regularly breached. Supplementary expenditures have frequently exceeded the 3% cap without prior approval, with some allocations being communicated to Parliament retroactively.
According to Parliament Watch, on 12 March 2025, Parliament approved the third supplementary schedule for the 2024/25 fiscal year, amounting to Shs 4.255 trillion. This brought the total supplementary budget to Shs 6.548 trillion—far exceeding the legal threshold and raising concerns about the government’s commitment to sound financial planning and transparency.
Gilbert Musinguzi, the Quality Assurance manager at Uganda Debt Network, criticised the practice of bypassing Parliament and making financial commitments without proper scrutiny.
He cited past instances where government funds were allocated to controversial activities such as debt forgiveness and bailouts for private companies, including Roko Construction and Atiak Sugar Factory, in the absence of a clear policy framework.
“Such decisions undermine revenue forecasts. When tax exemptions and bailouts are implemented through supplementary budgets, they erode the projected 32% revenue collection target, which distorts the entire fiscal plan,” Musinguzi noted.
He emphasised that adhering to the PFMA and the Charter of Fiscal Responsibility is essential, as both limit supplementary expenditure to 3% of the total budget unless the law is amended through a formal process.
Musinguzi also warned that unchecked supplementary spending often diverts resources from critical sectors such as health and education. He further pointed out the opacity of classified expenditure items, which make it difficult for oversight institutions and the public to track the actual utilisation of public funds.
Responding to these concerns, Nelson Kol, an official from the ministry of Finance, Planning and Economic Development, clarified that the ministry does not initiate supplementary budgets. Instead, such requests originate from various accounting entities—referred to as “votes”—including the Parliamentary Commission itself.
“We only coordinate and manage budget execution. The actual supplementary requests come from the respective votes,” Kol said.
He questioned why parliament often fails to fully allocate funds for essential activities during the annual budget approval process, only to later request emergency funds.
“We provide ceilings and guide on priority areas, but once they approve the budget, it’s up to them to ensure all needs are addressed. When they return with supplementary requests, it affects the rest of the planned expenditure because our domestic revenue stands at just Shs 32 trillion,” he explained.
Kol also highlighted challenges related to undisbursed loans, noting that commitment fees accrue during delays in loan execution—often due to prolonged negotiations between government entities and creditors.
By the time agreements are finalised, he said, economic conditions may have shifted, complicating disbursement and expenditure timelines. The dialogue concluded with a strong consensus on the need for institutional reforms and stricter enforcement of budgetary laws to restore credibility and accountability in Uganda’s public finance system.
Civil society organisations reiterated their commitment to working with Parliament and government stakeholders to promote transparency, enhance oversight, and ensure better outcomes for citizens.